Coni Otto, CRS Selling in DC/MD/VA

THINKING OF SELLING??

Are you thinking of selling your home? Even though you and the buyer may come to an agreement on the price, it is not uncommon in today's real estate market for an appraisal to be lower than the agreed upon contract price. When this happens, the buyer may no longer qualify for the loan amount and the deal can fall apart. What exactly does this mean and how does this happen?

Due to many short sales and foreclosures driving down appraisals, the above scenario has become somewhat common. Also, the Home Valuation Code of Conduct or HVCC that went into effect May-2009 has compounded the problem. The HVCC prohibits Fannie Mae and Freddie Mac lenders from having direct contact with appraisers. As a result, most lenders have started to work with appraisal management companies whose appraisers often have limited training or are not familiar with the area. So what is a seller to do?

Get an appraisal before listing your home. Be certain to use a local, qualified appraiser with a residential appraisal certification and is a member of the Appraisal Institute. This can also serve as a way to determine a realistic listing price for your home. This prelisting appraisal can be given to the buyer's appraiser and is often appreciated. A true professional will understand that as a property owner, you are only trying to provide as much data as possible.

Working closely with me, a professional Realtor familiar with your neighborhood can help you avoid many pitfalls before they occur leading to a higher price and faster closing. If you would like any additional information or are looking to buy or sell a home, call me.

I am now offering the Pre-listing appraisal with all my listings as an added service to my already 21 point marketing plan to sell your home... So if you are thinking of selling your home, call me today at 240-483-7556, no obligation.

Coni Otto - Long & Foster Real Estate, inc. Licensed in DC, MD, and VA

Office: 301-384-8700

Cell: 240-483-7556

www.Talk2Coni.com

Coni@Coniotto.com

After 6 years in Real Estate and Listing and selling more than 100 homes for sellers I have made a checklist for the sellers so they know what they can expect once their house goes under contract. With this changing market, this checklist can also change and not all experiences are the same.. But these are the most common questions I get, and emotional hurdles, the seller has to go through when selling their house... For a Free no obligation, "Price your house Right" consultation and my customized sellers packet please call me at 240-483-7556 or email me at Coni@ConiOtto.com I am always available to help....

What to expect when selling your home with me... The latest technology to market your home, updates at least once a week, 21 point Marketing plan, Experience and Knowledge, out of the box ideas to help you sell your home, Monthly Market Trends in your zip code, Internet Exposure, Neighborhood exposure, Print Media exposure, plus more..... Call me today for your FREE Consultation to List and Sell your home...

Key Contingencies to a Buyers offer are:

1. Home Inspection 7-10 days (Radon, Lead Paint, Septic, Well, Oil Heat)

2. Requested repairs by buyer

3. Appraisal ordered by the bank (What is your house Really worth)

4. Home must be in the same condition it was at the time of contract (A/C must work, appliances must work, toilets must flush, sinks must drain, etc.)

Sellers Checklist and
Hurdles to get to Settlement

Once the contract is Ratified the buyers are going to want to do a home inspection, the bank is going to do an appraisal, and finally the buyers will do a final walk through before settlement...

Sellers MUST:

1. Have all the utilities and water on and remain on until the settlement so all the inspections can be completed and most importantly the final walk through...

2. Give access to the buyers to do inspections and appraisal completed for the bank.

Hurdles to get to closing are:

1. Home inspection - The buyers will have the home inspected, some request Radon, Lead paint, septic, well, fireplace, etc…depending on what they find they will have their agent write-up a request for some items to be repaired. Some items you may want to fix, others you may not.. But until we get the list we won't know what they are going to ask for.... If they ask for something to be fixed they will give you a copy of the home inspection with a detailed list of what they want done.

This all has to be done within the time stated in the contract, if it’s 7 days they have 7 days to have the inspection and give us the request.

2. Appraisal - ordered by the buyers’ lender...Appraisers and lenders can no longer speak to each other so they will request the appraisal and then I will be contacted to give access to the property. He will ask me for a copy of the contract so he knows how much the house is under contract for and I will send it to him..


Then he will look at the square ft. of the house, the houses that have sold in the past 6 months within a 1 mile radius, or possibly 3 miles depending on what has sold, and the age and condition of the house, usually 10 years up or down...

Should he find that the most recent sales, with the criteria I have outlined are lower than what the contract is for then you may have to reduce the sales price. No bank will give a buyer a loan for more than the house appraises for, and buyers typically will not pay more than the house is worth. If the house appraised for $462,500 then the buyer’s agent will inform me that the appraisal is ok and we have completed another hurdle...

During the appraisal the lender may also ask for repairs, such as, if the air conditioning is not working the day he goes and does his appraisal, he will ask that it be serviced. This is just an example.. Any lender required repairs would have to be done in order for you to sell the house.

Some lender required repairs I have seen, that have to be done are:

1. Any peeling or chipping paint on or around the house or hand rails

2.Air conditioning not working

3.Stove is not working

4.Closet doors not secured

5.Cement steps that are crumbling and in need of repair

If the buyer is FHA, or VA these items would have to be done before the lending institution would give the buyer the loan. Generally, the buyers FHA addendum will outline the $$$ they expect the Seller to contribute to the lender required repairs. If the estimates are over that amount then the seller can ask the buyer to increase the price of the house to cover the costs, or reduce the amount of the seller credit to help with the additional costs to get the house sold.

Seller Help: If you are giving the buyer $10,000 in closing help you do not have to bring a check to closing “unless” you do not have any equity in your home to cover the costs of closing. So in this case the house is being sold for $462,500, you don’t owe anything on the house, and you are giving $10,000 in closing help. You don’t to bring any money to the table because you will be getting money at closing.

Title Company: The buyer gets to pick the title company for settlement, they will be contacting you “the seller” to get your payoff information on the house. If you do not owe anything on the house then you would just call them or fill out the documents stating you don’t owe.. If you do have a mortgage, then they will need your bank account number, your social security number, and the phone number to get the payoff info. So look for the packet in the mail asking for the info.

Closing day: Closing day is finally here and you need to bring your Government issued ID card to settlement. And just 1 last hurdle…. If the buyers find something in the house during their walk through, like the refrigerator no longer works, or the A/C unit doesn’t work, a clog in a sink, or anything else that is different from when they put the contract on the house, then they will ask you at the closing table for a credit (money) or for you to fix it. If they ask you to fix it, a dollar amount $ will go into escrow, generally $1000 until the item is fixed, then once the buyer is satisfied then they will sign off on the repair and the money will be returned to you.

Coni Otto

Wow, are we underwater in Laurel, MD and the DC Metro Area.... Take a look at my backyard..

http://www.youtube.com/watch?v=QfPWogHZQlI Click on Link

Did you know that there is a Anti-flipping law? What does that mean? It means if you purchase a property as an investor and you want to flip it you have to wait 90 days BEFORE YOU can accept a contract for the property. It's across the board, conventional, FHA, and VA....

So be prepared to hold the property for 90 days... FYI

Here is some info. on the FHA regulation...

Below you will see my email from FHA in response to my phone inquiry. In the response, you'll see that they cite Handbook 4155.2. A search of HUD's website led me to the 466-page handbook. In Chapter 4, page 25 (4-25), the anti-flipping regulation is laid out. A specific answer to the question as to when the 90 days begins can be found at 4155.2 4.7.e, which is on the bottom of Chapter 4, page 26 (4-26) It is very clear that the 90 day clock begins ticking on the "Seller's date of acquisition as the date of settlement on the seller's purchase of that property, and re-sale date as the date of execution of the sales contract by a buyer intending to finance the property with an FHA-insured loan."

Below is a link to the handbook. I've also attached a copy of the relevant page. FHA instructed me to have your UW call them if there is any uncertainty remaining.

http://www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4155.2/41552HSGH.pdf

Passing along the information I get to my clients and YOU.....